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We audited the U.S. Department of Housing and Urban Development’s (HUD) public housing program.  We conducted the audit as part of our annual audit plan and a congressional request.  Specifically, Congressman David P. Roe requested that we review the number of families residing in government-subsidized housing whose income exceeded current income limits.  Our audit objective was to determine the extent to which HUD-subsidized public housing units were occupied by overincome families and evaluate the impact of HUD policies.

Public housing authorities provided public housing assistance to as many as 25,226 families whose income exceeded HUD’s 2014 eligibility income limits.  Of these 25,226 families, 17,761 had earned more than the qualifying amount for more than 1 year.  HUD regulations require families to meet eligibility income limits only when they are admitted to the public housing program.  The regulations do not limit the length of time that families may reside in public housing.  However, HUD’s December 2004 public housing final rule gave public housing authorities discretion to establish and implement policies that would require families with incomes above the eligibility income limits to find housing in the unassisted market.  The 15 housing authorities that we contacted choose to allow overincome families to reside in public housing.  HUD did not encourage them to require overincome families to find housing in the unassisted market.  As a result, HUD did not assist as many low-income families in need of housing as it could have.  We estimate that HUD will pay $104.4 million over the next year for public housing units occupied by overincome families that otherwise could have been used to house low-income families.  Although it would be reasonable to expect that a minimum number of overincome families would reside in public housing at any time, HUD can significantly reduce the number of overincome families that reside in public housing.

We recommended that HUD direct housing authorities to establish policies to reduce the number of overincome families in public housing, thereby putting as much as an estimated $104.4 million to better use by providing those funds to eligible low-income families in need of housing assistance.

Data from the audit is available in HUD OIG’s FOIA Reading Room